PayPal taps POS maker Ingenico to expand in-store payment system

PayPal, which is lining up deals with payment solution providers to help quickly scale its upcoming in-store payment system, struck an agreement with Ingenico, whose point of sale terminals will soon be able to handle PayPal transactions. Ingenico said it has started integrating PayPal transactions using PayPal’s Access Card into its existing point of sale terminals and next generation POS devices.

Merchants who rely on Ingenico hardware will be able to accept both types of PayPal transactions including card payments and also purchases using a mobile phone number and PIN. Ingenico has 15 million terminals in use worldwide including 2 million in the United States.

The deal is another sign PayPal is moving quickly to ramp up its in-store payment system in preparation for a larger launch in the second quarter. PayPal is working with point of sale terminal makers and software providers to enable PayPal payments at millions of terminals. It signed a deal earlier this month with AJB Software Designs, which helps connect 250,000 point of sale terminals at many tier-one retailers to payment processors and financial institutions. Merchants and retailers will still need to choose to enable PayPal payments and do some back-end work to connect to PayPal but by working with payment infrastructure companies, PayPal makes it relatively easy for businesses to sign-on to PayPal’s system. The payment company is also in talks with VeriFone, the leader in point of sale terminals in the U.S.

The terms of the Ingenico deal have not been released. But Ingencio’s Thierry Denis, president of Ingenico North America, said the agreement with PayPal allows merchants to offer their consumers a choice in the types of payment forms they can use. Ingenico is also part of Home Depot’s trial of PayPal’s payment system.

“By working with PayPal to bring their payment solutions to offline retail, we will naturally empower both the merchant by providing a better way to connect with its shoppers to generate incremental sales, and the shoppers by adding speed and convenience at the checkout combined with expanded payment options. This relationship enables us to offer the most advanced solution for today’s practical shopper,” he said.

PayPal still has a lot to do to build out its in-store payment system. But it’s doing some key heavy lifting now, which should position it for a big year in 2012. As Don Kingsborough, PayPal’s VP of retail and pre-paid products told me in an interview last week, PayPal feels like it’s got a better solution than NFC that speaks to the broad needs of consumers and merchants. If it can nail down a deal with VeriFone and announce some big retail wins soon, PayPal might be poised to really move fast with its vision for shopping.

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